What is the single most common reason applications are declined?

Q: What is the single most common reason applications are declined?

More than anything else, it comes down to affordability: the amount requested is more than the company's cash flow can comfortably support. It is rarely a moral judgement on the business — it is arithmetic about headroom, and it is usually the most fixable thing there is. Why affordability leads Responsible lending means only lending what a business can manage. When the outgoings already leave little room, a new repayment tips the balance, and we decline rather than set a company up to struggle. The mechanism is in what does assessing affordability mean and how we decide whether to lend. The fix is often the amount If the full amount is too much, a smaller loan or shorter term may well fit. You do not have to take the maximum — see how much your business can borrow, and for how long and can i change the amount or term after an offer. Other common reasons Thin trading history, overdue filings and existing arrears also feature — the full list is in why an application might be declined. Each maps to an action in what strengthens an application. Sizing the loan to genuine headroom with the affordability tool at Credicorp Tools heads off the commonest decline before it happens. Ask for an amount that fits, and apply. We lend only to UK limited companies and LLPs, the loan is to the company with no director personal guarantee, and this is business finance outside the consumer-credit regime — as an exempt lender under Article 60B of the Regulated Activities Order we sit outside FCA consumer-credit regulation, so the Financial Ombudsman Service and FSCS do not apply.

Question

Accepted Answer

More than anything else, it comes down to affordability: the amount requested is more than the company's cash flow can comfortably support. It is rarely a moral judgement on the business — it is arithmetic about headroom, and it is usually the most fixable thing there is.

Why affordability leads

Responsible lending means only lending what a business can manage. When the outgoings already leave little room, a new repayment tips the balance, and we decline rather than set a company up to struggle. The mechanism is in what does assessing affordability mean and how we decide whether to lend.

The fix is often the amount

If the full amount is too much, a smaller loan or shorter term may well fit. You do not have to take the maximum — see how much your business can borrow, and for how long and can i change the amount or term after an offer.

Other common reasons

Thin trading history, overdue filings and existing arrears also feature — the full list is in why an application might be declined. Each maps to an action in what strengthens an application. Sizing the loan to genuine headroom with the affordability tool at Credicorp Tools heads off the commonest decline before it happens.

Ask for an amount that fits, and apply.

We lend only to UK limited companies and LLPs, the loan is to the company with no director personal guarantee, and this is business finance outside the consumer-credit regime — as an exempt lender under Article 60B of the Regulated Activities Order we sit outside FCA consumer-credit regulation, so the Financial Ombudsman Service and FSCS do not apply.

See also: Why an application might be declined?, What does 'assessing affordability' actually mean?, What strengthens an application?.